While there are digital solutions for documentary trade, their siloed nature leads to what the International Chamber of Commerce calls ‘digital islands’1. These kinds of digital solutions still need to be bridged using paper. New technology holds the promise of improved speed and processes and completely eliminating paper. However, realising these advantages requires a decentralised network, mirroring the decentralised nature of global trade. This is where blockchain comes in, making the trade process simpler, better, faster and safer. The records on blockchain are secured through cryptography. The design of Contour enables transaction data is only accessed by authorised parties. With this decentralised data storage set-up, corporates are able to trade safer.
Using blockchain technology, the Contour platform tracks and traces information as it moves between parties. It keeps all players in sync, reducing the need for reconciliation and speeding up your transactions, whilst providing you with end-to-end visibility. In the above transactions, this technology helped reduce the time taken for exchanging and checking documents, from the typical five to ten days to less than 24 hours.
Contour has a full open API capability allowing the platform to exchange information digitally with the ecosystem (e.g. eBL, ERP, contracting platforms etc).
The result of two years of pilot transactions and constant improvements and reiterations to the platform is that Contour accelerates the document flow of LCs by removing paper, enabling clients to accelerate their cash flow or get financed faster. This leads to increased trade volumes.
The future is now
A digitised world of global trade would drive trillions of dollars in new global trade flows and extend the benefits to smaller corporates as well as large. To effectively digitise this process and others requires users around the world to agree on a common process and a common network, and no bank, country, or corporate could ever accomplish this alone.
Traditional ‘FinTechs’ have attempted with centralised platforms, but this has been a barrier to scale as users are cautious to hand over sensitive trade data to a third party. This is why HSBC has invested in the development of Contour.
Contour uses the power of decentralisation to provide common tools and resources to help banks and corporates build a global network for trade, without having access to any transactional data. In 2020, Contour completed their beta phase involving over 75 corporates and 20 banks from 19 countries and they have started commercialising their platform in 2021.
While commercialisation has begun, the world of trade is vast. It could take another 3 to 5 years of collaborative work to gain critical mass. In the interim, clients are looking to increase the digital nature of their transactions to further drive process efficiencies by embracing existing digital offerings like electronic Bills of Lading, Mobile & Desktop Trade Applications, SWIFT for Corporate for Trade, etc. This will only serve to make the move to blockchain more beneficial.
We remain focused on working with other global and local financial institutions and governments, to ensure that we empower businesses like yours, by revolutionising trade finance.
Click on ‘Get in touch’ to find out how Contour can transform your trade.